The United States Commodity Futures Trading Commission (CFTC) has announced that it has filed a lawsuit in the Northern District Court of Illinois, accusing Tyche Asset Management, LLC, a registered commodity pool operator, and Phillip Galles, the company's main manager, as well as eight other Tyche entities controlled by Galles.
CFTC believes that Galles and Tyche entities have been scamming more than 50 people across the United States through the Ponzi scheme since October 2019, and have profited over $6 million from it.
CFTC accuses Galles and Tyche entities of commodity pool fraud. The complaint states that Galles and Tyche Asset Management LLC violated CFTC's rules on the normal operation of commodity pools and made false and misleading statements to the National Futures Association (NFA) of the United States.
CFTC requires the court to compensate participants in the commodity pool who were deceived in Galles and Tyche entities, confiscate illegal gains and impose civil fines, while permanently prohibiting the defendant from engaging in trading related industries.
CFTC's Director of Law Enforcement, Lan McGinley, stated, "As we allege, the defendant deceived participants with eccentric experience and knowledge, and used its CFTC registration to make false statements to the NFA, putting a seemingly legal cover on its fraudulent plan. In April 2023, CFTC quickly took action to hold the defendant accountable when it learned that the defendant had lied to the NFA
Background of the case
The lawsuit states that Galles falsely claimed to be a hedge fund and futures management tycoon, managing billions of dollars through Tyche Asset Management LLC and its affiliated entities. Galles also claims that Tyche has been trading commodity futures and options in the CFTC's regulated market in recent years, and through the use of advanced technology and strategies, its annual investment return rate has reached over 200%.
But in reality, Galles misappropriated investors' funds, and Galles and its Tyche entity almost never conducted any transactions with investor funds, only using these funds to maintain his luxurious lifestyle.
Galles and Tyche entities have been falsifying the documents submitted by NFA, attempting to prove that they have not raised or received client funds. In April 2023, when NFA censors directly inquired about Tyche's operations, Galles still refused to admit that he had designed a Ponzi scheme to raise funds.
